JAMB - Economics (2016 - No. 8)
The interest charged on loans is determined by the __________?
Exchange rate
Fiscal policy
Risk associated with the loan
Rate of production in the country
Explication
They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors' accounts. The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the amount of money the bank has available to lend.